Pricing Psychology with Paulina Masson - a podcast by Michael Veazey

Pricing Psychology with Paulina Masson of Shopkeeper.com 

Pricing psychology - is there a simple rule of thumb or complex?

Pricing psychology can be somewhat complex.



The biggest first thing to say about pricing is to keep it simple!



If you make price plus discount hard to calculate that puts buyers off



Think of $20 price plus $3 coupon



Two options on amazon



* Round $ amount

* %age off



Paulina usually uses amount, but if high price point, give % off



It’s easier to calculate.

Testing of Price vs. Coupon

Which converts better?



$21 product plus $3 coupon



* $21 product plus $4 coupon -



The $20 offer works better. Why?



PM believes that if it is a multiple of 21 (trained with multiplication table) we calculate discount quicker.

Using Split Testing to Determine Price Points

Most split testing on Amazon is not done well.



PM wouldn’t recommend it for the most thing unless you have a consistently high volume on top sellers in a short time.

Why not? Statistical significance

Statistical significance is needed! 25 sessions are not enough.



Other things change: PPC gives waves of traffic so you’d need to turn it off.



Seasonality is strong- and festivals eg the Cinqo de Mayo

Split testing for a week

PM runs like this:



One price for two weeks (tools online calculate statistical sign)



* Put the number of sessions - CVR wanted - tool gives statistical significance

* 500 views a day, want 15% CVR (have 12% at the moment )

* the tool tells you to run for



Did a whole year of split testing.

Split testing is hard - decide price more by your reading of the marketplace

Mostly on Amazon, we are competing on price - you can’t split test luxury



Overall supply and demand.



Split testing big differences will show up - but small differences a harder to work out.

Pricing Psychology Tricks: Strategies in Picking the Right Pricing

Why use .99 in end or .97?

$29.99 vs $30 - we all read left to right so “twenty-something” implies it’s cheaper



Also, we started equating “$0.99” to bargain and also low quality.



If you’re positioning the product as a luxury product for the spontaneous buyer. Eg $28 vs. $27.99.



It’s a differentiation point.



$0.97 vs. $0.99 vs. $0.79 probably doesn’t make so much difference.



People will still read it as “twenty-something”  - it gives extra work for the consumer’s brain.



Plus you make more profit.

Odd numbers vs. Even numbers

Because we are so conditioned to $x.99 - we are conditioned to feel that odd numbers



Even numbers give more of a luxury feeling eg $22



Odd numbers give more of a bargain feeling eg $21

What does the Shopkeeper app do? 

It’s a gross margin calculator but more of a business dashboard.



You can decide what the key things are going to be for you to focus on.



It’s designed to be very quick and easy to see P & L by profit line.



You can then dig into more and more complexity



amazingfba.com/shopkeeper redirect to an Affiliate link



Very nice deal - most software gives 30-day free trial.



This has 6-month free trial to analyze data and explore the tool.



If you’re a beginner, you can’t usually afford tools like this - but this is a huge opportunity to get to know the tool.

Bonus

Most apps give a 30-day trial



But Paulina is offering 6-month free trial

Further episodes of Amazing FBA Amazon and ECommerce Podcast, for Amazon Private Label Sellers, Shopify, Magento or Woocommerce business owners, and other e-commerce sellers and digital entrepreneurs.

Further podcasts by Michael Veazey

Website of Michael Veazey